nep-sea New Economics Papers
on South East Asia
Issue of 2017‒09‒03
39 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Narrowing development gaps through better governance in South-East Asia By Shuvojit Banerjee from the Macroeconomic Policy and Financing for Development Division.
  2. Population ageing and fiscal sustainability in East and North-East Asia By Yejin Ha from ESCAP Subregional Office for East and North-East Asia.
  3. Agricultural Insurance in Southeast Asia: Status and Directions By Jose M. Yorobe, Jr.; Pilipinas M. Luis; Bessie M. Burgos
  4. Analysis of the “Dutch Disease” effect: The case of resource-rich ASEAN economies By Taguchi, Hiroyuki; Soukvisan, Khinsamone
  5. Assessing Impacts of Land Use and Climate Change on Soil and Water Resources in the Srepok Watershed, Central Highland of Vietnam By Nguyen Thi Huyen; Le Hoang Tu; Nguyen Duy Liem; Vo Ngoc Quyn Tram; Duong Ngoc Minh; Nguyen Kim Loi
  6. Supporting National Commitment in Reducing GHG Emissions: A Painful Journey for Indonesian Local Government? By Sulistiadi Dono Iskandar; Andhika Putra Pratama
  7. Improving tax policy and administration in South-East Asia By Daniel Jeongdae Lee from the Macroeconomic Policy and Financing for Development Division.
  8. Large hydropower and legitimacy: a policy regime analysis, applied to Myanmar By Foran, Tira; Kiik, Laur; Hatt, Sullivan; Fullbrook, David; Dawkins, Alice; Walker, Simon; Chen, Yun
  9. A Vietnamese co-authorship network in social sciences: some graphical presentation of 2008-2017 Scopus data By Tung Manh Ho; Ha Viet Nguyen; Thu Trang Vuong; Quang-Minh Dam; Hiep Hung Pham; Quan-Hoang Vuong
  10. Disaster, Mitigation and Household Welfare in Indonesia By Teguh Dartanto
  11. Easing the traffic: The effects of Indonesia's fuel subsidy reforms on toll-road travel By Paul J Burke; Tsendsuren Batsuuri; Muhammad Halley Yudhistira
  12. Abnormal loan growth, credit information sharing and systemic risk in Asian banks By Wahyoe Soedarmono; Djauhari Sitorus; Amine Tarazi
  13. Impact of Climate Change on Aquaculture in Phu Vang District, Thua Thien Hue Province, Vietnam By Mac Nhu Binh; Le Van An; Nguyen Thi Thanh Thuy; Ngo Thi huong Giang; Ho Thi Thu Hoai; Truong Van Dan
  14. Financial Inclusion through Digital Financial Services and Branchless Banking: Inclusiveness, Challenges and Opportunities By Chaikal Nuryakin; Prani Sastiono; Faradina Alifia Maizar; Pyan Amin; Lili Yunita; Nanda Puspita; Moslem Afrizal; Christine Tjen
  15. Assessment of the 2017 Tax Reform for Acceleration and Inclusion By Manasan, Rosario G.
  16. Multidimensional poverty in Indonesia: How inclusive has economic growth been? By Arief Anshory Yusuf; Andy Sumner
  17. A Bad Luck: People with Disabilities (PWD) and Poverty in Indonesia By Adrianna Bella; Teguh Dartanto
  18. Precautionary Saving with Changing Income Ambiguity By Kajii, Atsushi; Xue, Jingyi
  19. Evaluation of Fiscal Incentives in the Philippines By Parel, Danileen Kristel C.
  20. Fish Aggregating Devices and the Role of Socio-economic Factors in Driving Spatial Effort Allocation of Fishers By Edison Roi Macusi
  21. Perspectives of Asia and the Pacific on the Antalya Sum mit of the G20 By Shuvojit Banerjee, Sudip Ranjan Basu, Alberto Isgut and Oliver Paddison from the Macroeconomic Policy and Development Division.
  22. How inclusive is growth in the Asia-Pacific region? By Oliver Paddison from the Macroeconomic Policy and Development Division.
  23. Reducing resource dependence: What can Asia-Pacific resource rich countries do? By Steve Loris Gui-Diby from the Macroeconomic Policy and Development Division.
  24. Does the quality of learning outcomes fall when education expands to include more disadvantaged students? By OECD
  25. Targeting Poverty under Complementarities: Evidence from Indonesia's Unified Targeting System By Tohari, Achmad; Parsons, Christopher; Rammohan, Anu
  26. Enhancing financial inclusion in Asia and the Pacific By Heather Taylor from the Macroeconomic Policy and Financing for Development Division.
  27. In-fill Asymptotic Theory for Structural Break Point in Autoregression: A Unified Theory By Jiang, Liang; Wang, Xiaohu; Yu, Jun
  28. Factors Influencing SMEs’ Engagement in Direct Exporting Activities By Mohamad D. Revindo; Christoper Gan
  29. Tri-Cycles Analysis on Bank Performance: Panel VAR Approach By Denny Irawan; Febrio Kacaribu
  30. Governance and development outcomes: chicken and egg By Steve Gui-Diby from the Macroeconomic Policy and Financing for Development Division.
  31. Socio-economic Approach to Microscale Flood Damage Assessment in a Lakeshore Community By Aisa O. Manlosa; Harold Glenn A. Valera
  32. Shifting structure of financial sector in Asia and the Pacific By Sudip Ranjan Basu and Rui Xu from the Macroeconomic Policy and Development Division.
  33. E-Government for better governance and fiscal management By Steve Gui-Diby and Xin Li from the Macroeconomic Policy and Financing for Development Division.
  34. Sharing Sequential Values in a Network By Juarez, Ruben; Ko, Chiu Yu; Xue, Jingyi
  35. The Long-Lasting Effects of Family and Childhood on Adult Wellbeing: Evidence from British Cohort Data By Sarah Flèche; Warn Lekfuangfu; Andrew E. Clark
  36. Uncertainty Averse Preferences and Changing Uncertainty Aversion By Xue, Jingyi
  37. Fair Division with Uncertain Needs By Xue, Jingyi
  38. Determinants of Urban Land Supply in China: How Do Political Factors Matter? By Hsu, Wen-Tai; Li, Xiaolu; Tang, Yang; Wu, Jing
  39. Asymptotic Theory for Estimating Drift Parameters in the Fractional Vasicek Model By Xiao, Weilin; Yu, Jun

  1. By: Shuvojit Banerjee from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: The need to narrow gaps in economic development of South-East Asia is particularly pressing given that deepening of subregional integration structures to fully realize the ASEAN Economic Community has already begun. Failure to close development gaps would run the risk that the economies of the later entrant countries − Cambodia, the Lao People’s Democratic Republic, Myanmar and Viet Nam (CLMV) may be overwhelmed by more developed neighbours and may not take full advantage of the opportunities emanating from integration. Narrowing the income and development gap will require measures that increase the availability and quality of physical capital, as well as improve workers’ skills and the availability of decent and productive jobs. In addition, there is a need to improve the economic fundamentals, wage and social protection systems and the effectiveness of fiscal policy.
  2. By: Yejin Ha from ESCAP Subregional Office for East and North-East Asia. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: East and North-East Asia is experiencing unprecedented population ageing. The combined population of the subregion in 2015 accounted for about 22 per cent of the world’s total population, while the population aged 65 or older in the subregion constituted 29 per cent of older persons worldwide. It is estimated that, by 2035, the share of the older population in the subregion would increase to 31 per cent of the total for East and North-East Asia. Japan has the highest proportion of people aged over 65 in the world, and the country’s population size is already shrinking. Similarly, the pace of population ageing is rapid in China. The proportion of people aged 65 or older in the total population is projected to increase from 6.7 per cent in 2000 to 12.1 per cent in 2020 and 27.6 per cent in 2050. All major economies in the subregion, except Mongolia, are likely to face a declining working-age population after 2020. In comparison, the workingage population in the ASEAN-4 countries (Indonesia, Malaysia, the Philippines and Thailand) will continue to grow and reach a plateau only after 2050.
  3. By: Jose M. Yorobe, Jr.; Pilipinas M. Luis; Bessie M. Burgos
    Abstract: With climatic shifts becoming more prominent and extreme climatic events becoming more frequent, Southeast Asia (SEA) is considered one of world’s most vulnerable to climate change because of its heavy reliance on agriculture (ADB 2009). In 2013, around 40 million people in SEA were affected by natural calamities, many of whom are dependent on agriculture. Loss due to floods amounted to USD 10.7 billion in 2010 (ADB 2014). Super Typhoon Haiyan, the powerful tropical cyclone that hit Southeast Asia on 8 November 2013, is the worst ever recorded, with an economic cost amounting to USD 13 billion (International Business Times 2015). Agricultural interests are fundamental in managing food security. Local governments are major stakeholders in agriculture as well as the best contenders to partake in a robust finance-based solution, such as insurance. Of the 11 countries in SEA, only six (Indonesia, Malaysia, Philippines, Singapore, Thailand [pilot stage], and Vietnam [pilot stage]) have agricultural insurance programs (World Bank 2010). Several countries have already adopted index insurance program in the region. Basis risk is one of the serious obstacles to the effectiveness of index insurance. However this can be reduced in two ways (Miranda and Farrin 2012): (1) to offer a wider array of index insurance products tailored to different risk exposures; and (2) by constructing indemnity schedules that correlates maximally with policy holder losses. To achieve both requires sound and accurate information, and data from which the index was based. Weather index-based crop insurance that will incorporate historical weather and crop production data is more costeffective and efficient than traditional agricultural insurance. It will reduce farmlevel monitoring and transaction costs (ADB 2013). The promotion of market-based agricultural insurance is proven to be critical for the emergence of sustainable agricultural insurance program (Mahul and Stutley 2010). The public-private partnership (PPP) can be viewed as an initial step in providing the direction towards the emergence of private led agricultural insurance programs. The role of the government is confined in correcting market and regulatory imperfections for a competitive insurance market to emerge. The SEA countries collaboration in the areas of research and training, institution and capacity building, information sharing and knowledge management, and awareness raising can provide a less costly support service mechanism in the development of a more competitive insurance market. Pooling research funds by governments for insurance purposes will be effective in addressing the information and data needs for a more viable risk and cost assessments. The pan-ASEAN agriculture pool is a collective scheme that can ease the risks associated with agricultural production and food security in the region. The ASEAN Member States (AMS) contribute underwriting capacity based on the relative importance of agriculture trade to their economies (Corona 2013). The AMS which are net consumers of agricultural products will subsidize the insurance premiums of those countries which are net producers, as a result fostering food security and political stability across the region. The main goal of the insurance scheme is to encourage farmers to continue food production despite risks.
    Keywords: agri-insurance, Southeast Asia
    Date: 2016
  4. By: Taguchi, Hiroyuki; Soukvisan, Khinsamone
    Abstract: This paper examines the applicability of the Dutch Disease hypothesis by using a vector auto-regression model, focusing on the five resource-rich and middle-income economies in the Association of Southeast Asian Nations (ASEAN): Malaysia and Indonesia as the forerunners, and Lao PDR, Myanmar and Vietnam as the latecomers at their development processes. The empirical study found that the latecomers of Lao PDR and Myanmar seemed to suffer from the Dutch Disease over the sample period; and the forerunners of Indonesia and Malaysia, on the other hand, appeared to have no Dutch Disease effect at least in the current period of 1995-2015, although Indonesia had experienced the Dutch Disease in the previous period of 1970-1995. The lessons from the forerunners’ experiences in order for the latecomers to escape from the Ditch Disease are to establish some funding system of allocating resource revenues for investment projects; to diversify domestic industries through improving business environments; and to improve institutional quality to reinforce resource governance.
    Keywords: Dutch Disease, ASEAN, Vector auto-regression model, Natural resources, Resource fund, Diversification, Institutional quality
    JEL: F43 L60 O53
    Date: 2017–08
  5. By: Nguyen Thi Huyen; Le Hoang Tu; Nguyen Duy Liem; Vo Ngoc Quyn Tram; Duong Ngoc Minh; Nguyen Kim Loi
    Abstract: The Srepok River basin, which flows along four provinces in Vietnam and parts of Cambodia, is presently facing critical issues such as floods and droughts, pollution of waterways, deforestation of catchments, erosion and resultant sedimentation of reservoirs, overexploitation of groundwater, water-use conflicts, and transborder issues. This study aims to investigate changes in streamflow and sediment yield that result from land use changes, and climatic variation in the Srepok watershed. Plausible scenarios of land use change are simulated through Geographic Information System (GIS) using current conditions and information from the area as bases, and climate change scenarios built on outputs of General Circulation Models (GCMs) from the Southeast Asia System for Analysis, Research and Training (SEA-START 2009). These changes, individually or in combination, are input into the soil and water assessment tool (SWAT) to project future hydrological variables. Simulations have shown increase in annual average temperature at 0.75–2.5 degrees celsius and decrease in precipitation at 200–500 milimeters. These are both in medium- and high-emission scenarios for the period 2011–2039 and 2040–2069. Annual streamflow in medium- and high-emission scenarios appeared to be 3.7–5.6 times lower than the base scenario in 1990–2010. All scenarios are different in terms of amount and distribution of streamflow in the dry and rainy seasons. Shifts in rainy season, rainfall, and land cover have led to fluctuations in the amount of sediments. Total sediment yield in 1990–2010 is 9.1 times higher than in the medium-emission scenario, and 8.1 times higher in the high-emission scenario. For water components, the Srepok watershed showed over 60 percent streamflow and 36 percent evapotranspiration. Groundwater contributes over 60 percent to the total flow in the watershed than surface water. Therefore, groundwater also contributes to water availability in the Srepok watershed in the future. Results of this research can serve as baseline for plans for the Srepok watershed.
    Keywords: climate change, land use, Vietnam
    Date: 2017
  6. By: Sulistiadi Dono Iskandar (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Andhika Putra Pratama (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: In 2009, Indonesian ex-President, Susilo Bambang Yudhoyono declared Indonesia’s commitment to reduce its Green House Gas (GHG) emission. The commitment later being legalized in Government Regulation No. 61 2011 (PP 61 Tahun 2011) along with the legal establishment of RAN-GRK (National Action Plan for GHG Emission Reduction) and RAD-GRK (Local Action Plan for GHG Emission Reduction) Program. However, following ï¬ ve years after the implementation of both program, the effectiveness itself is still in question especially in the case of local government level. This paper aims to evaluate the effectiveness of GHG emission mitigation activities in provincial level from the budget perspective. On top of that, this paper also attempts to investigate the determinant factors of local government’s effort to reduce GHG emission proxied by the total mitigation expenditure in the particular province. Using Panel data analysis for each province with timespan of 2010–2015, our results suggest that mitigation activities conducted by the local government are signiï¬ cant in reducing the GHG emission. Our result also shows that local government’s ï¬ scal capacity does determine the level of budget dedicated for reducing GHG emission although with a very low coefï¬ cient, suggesting that emission mitigation has not became a priority for the local government in Indonesia
    Keywords: GHG Emission - RAN-GRK - Panel Data - Local Government - Mitigation Expenditure
    JEL: Q54 Q58
    Date: 2017–07
  7. By: Daniel Jeongdae Lee from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: An important function of the government is to collect taxes for the provision of public goods. While a number of South-East Asian economies, such as Indonesia and the Philippines, have relatively low tax revenues as a share of GDP, there is renewed public interest in strengthening tax revenues for better education, healthcare and infrastructure, especially in the context of the recently adopted 2030 Agenda for Sustainable Development. This policy brief discusses how improvements in tax policy and administration could help raise adequate revenues and provides illustrative estimates of ‘potential’ tax revenues.
  8. By: Foran, Tira; Kiik, Laur; Hatt, Sullivan; Fullbrook, David; Dawkins, Alice; Walker, Simon; Chen, Yun
    Abstract: Hydropower development in capacity-constrained countries can unfold through unsound policy arguments, narrow institutional and implementing arrangements, and ad hoc decision making processes. To derive insights for more legitimate policy making, we provide the first holistic account of Myanmar’s legitimation struggles over large hydropower, focusing on Myitsone, the country’s most controversial dam, during the period 2003–2011. Our analysis takes a policy regime perspective (specifically, a “political economic regime of provisioning” framework). Among our findings: (1) frequent use of non-rationally persuasive argument among contending actors; (2) a spiral of declining policy legitimacy, which is amplified by civil society mobilization, and halted by a 2011 decision to suspend Myitsone; (3) rejection of Myitsone but conditional acceptance of large hydropower among some elements of civil society. Opportunity and capability for more technically informed, inclusive discussion exists in Myanmar, but given hydropower’s complexities, urgently deserves to be augmented. Although Myitsone in Myanmar is an exceptional case, we offer three propositions to assess and improve policy legitimacy of hydropower.
    Keywords: energy governance; hydropower; policy regime; gaining public acceptance; political ecology; Mekong
    JEL: P16 Q25 Q28 Q42
    Date: 2017–08–23
  9. By: Tung Manh Ho; Ha Viet Nguyen; Thu Trang Vuong; Quang-Minh Dam; Hiep Hung Pham; Quan-Hoang Vuong
    Abstract: The application of social network analysis in studying science collaboration has not been used for studying science activities in Vietnam although collaboration is popular among Vietnamese scientists. This paper employs network visualization together with basic network measures to explore characteristics of the network of 412 Vietnamese social scientists whose papers can be found indexed in the Scopus database. Early results show that the network’s connections are very sparse, with only 0.52% density, but the clustering coefficient is very high, 58.64%, suggesting that the dissemination of scientific knowledge and expertise in the network is not very efficient. Secondly, the disparity in the levels of connection among individual researchers in the network indicates that it would easily fall apart if a few highly-connected nodes are removed. Finally, upon zooming in on the two largest components of the network, the study found that their characteristics differ from the whole and both of them are led by the most productive researchers who also have the most connections.
    Keywords: Social network analysis; Science collaboration; Network characteristics; Research output
    JEL: I23 O32
    Date: 2017–08–21
  10. By: Teguh Dartanto (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: Households in the world as well as in Indonesia have become more exposed to a wide variety of vulnerabilities and risks due to the recent increase in the intensity and scope of global natural disasters. This study aims to comprehensively examine the impact of natural disasters on Indonesian’s household welfare (consumption and poverty) using the Indonesian Family Life Survey (IFLS). This study finds that households in rural areas are the most vulnerable to natural disasters; the average asset losses and medical/funeral costs from natural disasters are roughly USD 2,190/household. Our econometric models confirm that earthquakes are the most destructive disaster to affect household welfare, whereas droughts, forest fires, floods, and other disasters appear to have only moderate effects. Disaster-mitigation preparedness plays a significant role in reducing the devastating impacts of disasters and in lessening households’ vulnerability to becoming impoverished.
    Keywords: Natural Disaster — Welfare — Vulnerability
    JEL: Q54 I31 I32
    Date: 2017–06
  11. By: Paul J Burke; Tsendsuren Batsuuri; Muhammad Halley Yudhistira
    Abstract: Indonesia has serious traffic jams. This study uses data from 19 Indonesian toll roads over 2008-2015 to calculate the effects of Indonesia's historic recent fuel subsidy reforms on motor vehicle travel. The timing of the reforms was determined by budgetary and political factors, providing a suitable setting for estimating a causal effect. We control for a broad set of other factors potentially influencing traffic flows. Estimates using monthly data suggest an immediate fuel price elasticity of motor vehicle flows on the roads in our study of -0.1, increasing to -0.2 when responses over a year are considered. We estimate that Indonesia's fuel subsidy reforms of 2013 and 2014 had reduced traffic pressure on these roads in the second half of 2015 by around 10% relative to the counterfactual without reform. A move to an adequate fuel excise system could contribute to more free-flowing traffic, while generating revenue for infrastructure and other investment.
    Keywords: fuel subsidy, gasoline, price, elasticity, transport, Indonesia
    JEL: R41 R48 H20
    Date: 2017
  12. By: Wahyoe Soedarmono (Universitas Siswa Bangsa Internasional, Faculty of Business / Sampoerna School of Business); Djauhari Sitorus (The World Bank); Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - UNILIM - Université de Limoges - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société)
    Abstract: This paper investigates the interplay of abnormal loan growth, credit reporting system and systemic risk in banking. Based on a sample of publicly traded banks in Asia from 1998 to 2012, higher abnormal loan growth leads to higher systemic risk one year ahead. A closer investigation further suggests that better credit information coverage and private credit bureaus can stem the buildup of bank systemic risk one year ahead due to higher abnormal loan growth. Eventually, this paper offers some supports to strengthen macro-prudential regulation to limit abnormal loan growth. This paper also advocates the importance of strengthening credit information coverage and the role of private credit bureaus in Asian countries to mitigate the negative impact of abnormal loan growth on bank systemic stability.
    Keywords: credit reporting system,Abnormal loan growth,systemic risk,Asian banks
    Date: 2017–07–10
  13. By: Mac Nhu Binh; Le Van An; Nguyen Thi Thanh Thuy; Ngo Thi huong Giang; Ho Thi Thu Hoai; Truong Van Dan
    Abstract: Climate change is a major global concern that greatly affects people, including their source of living. In 2010, the Asian Development Bank reported that Vietnam is one of the five countries most severely affected by climate change. About 70 percent of the country's total population lives along coastal areas and in islands. This study aimed to (1) evaluate the impacts of climate change on aquaculture in Phu Vang district (Thua Thien Hue province, Vietnam), and (2) develop a climate change adaptation model for aquaculture. Data on impact of climate change to aquaculture production were gathered through participatory rural appraisal tools, while spatial changes in water quality were determined through Geographic Information System (GIS). Experimental polyculture models were set up in the five study-site communes to determine the aquaculture practices that could be disseminated to small farmers. It was found out that Phu Vang had suffered heavy losses from climate change brought about by a combination of droughts and prolonged heat waves, and cold weather that lasted longer. Floods and typhoons have likewise occurred with stronger intensities, and tide amplitude has changed drastically. All these affected agricultural activities, especially aquaculture, which is considered as one of the most vulnerable sectors to climate change impacts. As a result, many households shifted from intensive to extensive culture, and some even left their ponds for other jobs. The limited understanding and capacity of people on climate change aggravated the situation, affecting their ability to respond and mitigate negative impacts. Water quality, specifically for aquaculture, was also affected as a result of rising temperature, prolonged droughts, rainfall, flooding, and salinization, which in turn reduced productivity and yield. Meanwhile, polyculture models of aquaculture implemented for this study brought high economic returns, and could be promising to replicate in various communes of Phu Vang district. The following are the primary recommendations to mitigate climate change impact in aquaculture and to facilitate sustainable livelihood for coastal people: capacitate communities and government in climate change adaptation and mitigation; expand promising aquaculture practices, area, infrastructure, and marketing of produce; and implement policies to mitigate damages of climate change to aquaculture and the community as a whole.
    Keywords: climate change, aquaculture, Vietnam
    Date: 2017
  14. By: Chaikal Nuryakin (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Prani Sastiono; Faradina Alifia Maizar (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Pyan Amin; Lili Yunita (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Nanda Puspita (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Moslem Afrizal (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Christine Tjen (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: The initiative to enhance financial inclusion in Indonesia has been done through Financial Digital Service (LKD) by Bank Indonesia (BI) and Smart Act Branchless Banking Service for Financial Inclusion (Laku Pandai) by Financial Services Authority (OJK). There are several factors contributing to the success of both programs. One of the most important factors is the quality of the agents in charge. In order to monitor the development progress of financial inclusion brought by both programs, LPEM FEBUI conducted preliminary research through financial service agent field survey in West Nusa Tenggara and Aceh. The programs inclusiveness, challenges faced by agents, and opportunity for service expansions are three components assessed in the study. The results depicted that, despite the leap in the number of agents, both programs so far serve mainly as complimentary service. It is also found that, although agents find sufficient profitability and sustainability, there are still notable challenges in infrastructure, funding, and technical capability which need to be addressed. Such results recommend regulator, especially BI and OJK, to put more attention on the establishment of information and training center for their agents and enhancement on digital inclusion as well as electricity coverage
    Keywords: Financial Inclusion — LKD — Laku Pandai — Digital Inclusion
    JEL: G28 G21
    Date: 2017–06
  15. By: Manasan, Rosario G.
    Abstract: Despite various reform efforts over the years, the tax system in the Philippines continues to suffer from chronic weaknesses. The Duterte administration is pursuing a simpler, more efficient, and more equitable tax system to support its economic growth strategy. The administration's Comprehensive Tax Reform Program was filed as House Bill (HB) No. 4774 in January 2017 at the lower house and Senate Bill (SB) No. 1408 at the Senate. These bills represent the first of several reform packages that will each focus on different areas of tax policy. The House of Representatives approved a compromise bill, HB 5636, titled "Tax Reform for Acceleration and Inclusion" or TRAIN in May 2017. HB 4774, HB 5636, and SB 1408 seek to reform the structure of the personal income tax, value-added tax, and excise tax on petroleum products and automobiles, while improving the progressivity of the tax system. A portion of the additional revenues generated will be earmarked for investments in education, infrastructure, and health to stimulate long-term growth. This paper aims to assess the implications of these bills on the distribution of tax burden across income groups, economic incentives in affected sectors, national government revenues, and likely impact on tax compliance.
    Keywords: Philippines, personal income tax, tax reform, value-added tax, excise tax on petroleum, excise tax on automobiles, excise tax on sugar sweetened beverages
    Date: 2017
  16. By: Arief Anshory Yusuf; Andy Sumner
    Abstract: In this paper, we consider different approaches to assessing inclusive growth in Indonesia since 1994. We discuss the growth incidence curve, changes in the poverty headcount by the national monetary/consumption poverty line, and changes in inequality indicators. We then develop a measure of inclusive growth based on multidimensional poverty that expands the lens to include not only education, health and household assets, but also employment. We find that the reduction of poverty measured by the national poverty line is matched by the impressive reduction in education and health poverty, and expansion of household assets. However, some basic problems remain in terms of school completion and vaccination coverage, and progress on employment-related poverty in our assessment of inclusive growth has been minimal in the last decade. We argue that the use of multidimensional poverty to assess the inclusivity of growth draws attention to the successes of administrations in providing public goods, and the enormous remaining challenge of providing sufficient employment opportunities.
    Keywords: inclusive growth, multidimensional poverty, inequality, Indonesia
    JEL: O1 O15 I3
    Date: 2017
  17. By: Adrianna Bella; Teguh Dartanto (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: PWD are more likely to have a lower socioeconomic status and a couple of disadvantages due to earning and conversion handicap. Involving PWD on the development agenda will expedite the progress of poverty reduction; however, there is still a low prioritization of poverty eradication of PWD due to lack of data and research. Therefore, there is an urgent need to provide evidence-based study to support and mainstream PWD on the development agenda in Indonesia. This study, using the 2012 third quarter of national-social economic survey (SUSENAS 2012 Q3), aims at examining the impacts of disability, types and sources of disability on household’s poverty status and household’s poverty gap index. Applying Logistic and Tobit regressions, this study confirmed that disabled-headed household is more likely to become poor by 1.3% and have deeper poverty gap index by 2.6%. Household heads with a visual impairment are less likely to be poor compared to other disabled-headed households. On the other hand, a disabled household head who has a self-care problem tends to have a higher probability of falling into poverty. Moreover, household head with congenital disability has a higher probability of being poor by 4.8% and has deeper poverty gap index for about 7.8%. This study then suggests three policy recommendations in order to eradicate poverty of PWD: 1) provide rehabilitative care for PWD with self-care problem, 2) prevent disabilities at birth through prenatal intervention, and 3) establish different poverty alleviation policies for PWD and non-PWD, due to their different circumstances and needs.
    Keywords: People with Disabilities (PWD) — Poverty — Indonesia
    JEL: I31 I32 J14
    Date: 2016–05
  18. By: Kajii, Atsushi (Kyoto University, Singapore Management University (Visiting Professor)); Xue, Jingyi (School of Economics, Singapore Management University)
    Abstract: We study a two-period saving model where the agent’s future income might be ambiguous. Our agent has a version of the smooth ambiguity decision criterion (Klibanoff, Marinacci and Mukerji (2005)), where the agent’s perception about ambiguity is described by a second-order belief over first-order risks. We model increasing ambiguity as a spreading-out of the second-order belief. We show that under a “Risk Comonotonicity” condition, our agent saves more when ambiguity in future income increases. We argue that the condition is indispensable for our result.
    Keywords: Precautionary Saving; Smooth Ambiguity; Increasing Ambiguity; Risk Comonotonicity; Informativeness
    JEL: D80 D81 D91 E21
    Date: 2016–06–06
  19. By: Parel, Danileen Kristel C.
    Abstract: The advantages of foreign direct investment to host countries, particularly on economic growth, have long been recognized. The amount of investment that enters a country is influenced by various factors, including tax rates and the provision of fiscal incentives. This paper (1) assesses how the Philippines fares in attracting investments compared with its neighboring countries and (2) evaluates pending incentive reforms in the country. As the corporate income tax does not take into account other tax rules, effective tax rates, which provide a single measure reflecting the combined effect of all tax rates and incentives, were computed and used in the assessment.
    Keywords: Philippines, fiscal incentives, tax incentives, foreign direct investment, FDI, effective tax rates, tax holiday
    Date: 2017
  20. By: Edison Roi Macusi
    Abstract: Although fish aggregating devices (FADs) efficiently gather fish, save time and fuel, and alleviate food insecurity, their widespread use has become contentious because of the destructive impact on juvenile oceanic tuna. The call to regulate the number of deployed FADs has been continuous to reduce the unintended catching of non-target juvenile species of tuna. Improving the practice of using FADs could also benefit from studying fishers' spatial behavior, FAD distribution, and decision making. This research thus examined how fishers use their FADs and how their characteristics and socio-economic factors influence their decision making and catch productivity. Semi-structured interview was administered to a total of 229 respondents in four study sites—Mati City, Lupon, Governor Generoso, and General Santos City, all in Southern Philippines. On the other hand, focus group discussions (FGDs) clarified information on catch data and on factors essential to understand where fishers fish and where they deploy their FADs. Potential catch data estimates from logbooks of fishers provided information on probability of catch on FADs and influence of monsoon. Results showed that fishers decided where to fish based on weather and sea conditions, socio-economic factors such as price of fuel and fish, information from other fishers and their other activities, and the imposition of sea regulations. On the other hand, decision on where to deploy FADs were influenced by the availability of the area, information on the pathway of fish and sea current, information from other fishers on good locations, and previous catches from a particular area. The study also revealed that while FAD deployment might be a long-term strategy to keep fishing grounds, the high probability that a potential catch exists on FADs (>70%) has increased the deployment of FADs in nearshore areas. Excessive deployment of FADs has resulted to overfishing. To conserve fish resources, a moratorium on the number of boats and FADs should be implemented. Issuance of licences for boats, gears, and FADs should also be controlled and limited.
    Keywords: fishery, fish aggregating device, spatial effort allocation, Philippines
    Date: 2017
  21. By: Shuvojit Banerjee, Sudip Ranjan Basu, Alberto Isgut and Oliver Paddison from the Macroeconomic Policy and Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: This year’s G20 summit will take place on 15-16 November 2015 in Antalya, Turkey. The Turkish presidency of the G20 laid out three priorities: strengthening the global recovery, enhancing resilience, and buttressing sustainability. To ensure inclusive and robust growth through collective action, the Turkish presidency suggested focusing on three I’s: inclusiveness, implementation, and investment for growth.1 The Antalya Summit of the G20 takes place in a year when the members of the United Nations will adopt a transformative post-2015 development agenda. The three I’s of the Turkish presidency provide a useful strategic view on ways to support this process by strengthening growth and development in the G20 economies. This policy brief offers perspectives on this agenda and discusses its relevance for Asia and the Pacific.
  22. By: Oliver Paddison from the Macroeconomic Policy and Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: On September 25, 2015, the international community adopted the 2030 Agenda for Sustainable Development, a framework that comprises, as a succession to the Millennium Development Goals (MDGs), a set of 17 Sustainable Development Goals (SDGs), with 169 corresponding targets. This framework, which is the culmination of years of deliberations and negotiations that have taken place since the Rio+20 outcome document, The future we want, will guide the formulation of development policies for the next 15 years. The Asia-Pacific region made tremendous progress towards reaching the MDGs. On the back of impressive economic growth, millions of people were lifted out of extreme poverty to the extent that the region reached before the 2015 deadline the first target under the Millennium Development Goal of eradicating extreme poverty and hunger by halving the proportion of people whose income is less than $1 a day. Yet, the region still faces significant development challenges. Thus, while it is still home to more than 740 million people, accounting for two-thirds of the world’s extremely poor, the region faces an unfinished development agenda in the areas of health, education, gender equality, decent employment and access to safe sanitation and drinking water: an estimated 21 million children are not enrolled in primary school, and 1 in 5 children under age of five, representing 75 million children in total, are underweight. A staggering 1.7 billion people still lack access to safe sanitation.
  23. By: Steve Loris Gui-Diby from the Macroeconomic Policy and Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: Many Asia-Pacific economies are excessively reliant on certain commodities for growth, fiscal revenues and foreign exchange earnings. In more than a dozen countries, commodity exports account for more than 10 per cent of the GDP. The current decline in a host of commodity prices has exposed this vulnerability. In general, over the last 25 years, the total natural resources rent, which is defined as the difference between the commodity price and its average production cost, increased significantly in several economies with an average increase of 8.5% in terms of percentage change. With diverse income and population levels, growth and macroeconomic stability in these countries are highly vulnerable to changes in commodity prices.
  24. By: OECD
    Abstract: Globally, enrolment in secondary education has expanded dramatically over the past decades. This expansion is also reflected in PISA data, particularly for low- and middle-income countries. Between 2003 and 2015, Indonesia added more than 1.1 million students, Turkey and Brazil more than 400 000 students, and Mexico more than 300 000 students, to the total population of 15-year-olds eligible to participate in PISA. This welcome expansion in education opportunities makes it more difficult to interpret how mean scores in PISA have changed over time. Indeed, increases in coverage can lead to an underestimation of the real improvements that education systems have achieved. Household surveys often show that children from poor households, ethnic minorities or rural areas face a greater risk of not attending or completing lower secondary education. Typically, as populations that had previously been excluded gain access to higher levels of schooling, a larger proportion of low-performing students will be included in PISA samples.
    Date: 2017–08–29
  25. By: Tohari, Achmad (Airlangga University); Parsons, Christopher (University of Western Australia); Rammohan, Anu (University of Western Australia)
    Abstract: Combining nationally representative administrative and survey data with official proxy means testing models and coefficients, we evaluate Indonesia's three largest social programs. The setting for our evaluation is the launch of Indonesia's Unified Targeting system, an innovation developed to reduce targeting errors and increase program complementarities. Introducing a new method of evaluation under the condition of multiple programs, we show that households receiving all three programs are at least 30 percentage points better off than those receiving none. Importantly, the bias from failing to account for program complementarities is greater in magnitude than the benefits of receiving a single program.
    Keywords: poverty, targeting, Indonesia, complementarities
    JEL: D04 I32 I38 O12
    Date: 2017–08
  26. By: Heather Taylor from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: Designing financial inclusion strategies is a significant tool for ending poverty. It not only provides access to financial services and enhances the financial literacy of the poor, but it also allows micro, small and medium enterprises (MSMEs), startups and young firms, and innovative projects greater access to finance. However, the level of financial inclusion and its impact on poverty, employment and narrowing the gender gap varies widely across countries. Policies, therefore, need to be mainstreamed to improve full and equal access to financial services for all, with appropriate attention given to financial stability matters.
  27. By: Jiang, Liang (School of Economics, Singapore Management University); Wang, Xiaohu (The Chinese University of Hong Kong); Yu, Jun (School of Economics, Singapore Management University)
    Abstract: This paper obtains the exact distribution of the maximum likelihood estimator of structural break point in the Ornstein-Uhlenbeck process when a continuous record is available. The exact distribution is asymmetric, tri-modal, dependent on the initial condition. These three properties are also found in the finite sam- ple distribution of the least squares (LS) estimator of structural break point in autoregressive (AR) models. Motivated by these observations, the paper then develops an in-fill asymptotic theory for the LS estimator of structural break point in the AR(1) coefficient. The in-fill asymptotic distribution is also asymmetric, tri-modal, dependent on the initial condition, and delivers excellent approximations to the finite sample distribution. Unlike the long-span asymptotic theory, which depends on the underlying AR root and hence is tailor-made but is only available in a rather limited number of cases, the in-fill asymptotic theory is continuous in the underlying roots. Monte Carlo studies show that the in-fill asymptotic theory performs better than the long-span asymptotic theory for cases where the long-span theory is available and performs very well for cases where no long-span theory is available.
    Keywords: Asymmetry; Bias; Exact distribution; Long-span asymptotics; In-fill asymptotics; Trimodality.
    JEL: C11 C46
    Date: 2017–05–19
  28. By: Mohamad D. Revindo (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Christoper Gan (Professor in Accounting and Finance, Faculty of Agribusiness and Commerce Department of Finance and Business System Lincoln University New Zealand)
    Abstract: The benefits of trade liberalisation are not shared equally among countries and enterprises across the globe. Small and Medium-sized Enterprises (SMEs) in developing countries are less able to participate in export market than their large counterparts despite various export assistance provision by the government. This study aims to investigate the factors influencing Indonesian SMEs’ decision and ability to engage in direct exporting activities. The evidences were collected from 271 exporting SMEs and 226 non-exporting SMEs in seven provinces in Jawa, Madura, and Bali regions. Logistic regressions were used to identify the distinct characteristics of exporting SMEs. The findings show that the exporters differ from non-exporters in firm and owner characteristics, perceived export barriers, participation in government export assistances and network relationships. The policy and managerial implications of the findings are discussed
    Keywords: SMEs - Firm Internationalisation - Export Decision - Export Barriers - Indonesia
    JEL: F23 L25 M13 M16 O17
    Date: 2017–07
  29. By: Denny Irawan (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Febrio Kacaribu (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: The financial crisis of 2007/8 has revealed the importance of risk, besides credit, in the dynamics of financial cycle and business cycle in the economy. This study examines relationship among those three cycles in the economy (Tri-Cycles), namely (i) business cycle risk, (ii) credit cycle and (iii) risk cycle, and their impacts toward individual bank performance. We examine the responses of individual bank credit cycle and risk cycle toward a shock in business cycle risk and its consequence to the bank performance. We use Indonesian data for period of 2002q1 to 2014q4. We use unbalanced panel data of individual banks’ balance sheet with Panel Vector Autoregressive approach based on GMM style estimation by implementing PVAR package developed by [1]. The result shows dynamic relationship between business cycle risk and financial risk cycles. The study also observes prominent role of risk cycles in driving bank performance. We also show the existence of financial accelerator phenomenon in Indonesian banking system, in which financial cycles precede the business cycle risk.
    Keywords: Business Cycle Risk — Credit Cycle — Bank Lending — Financial Risk
    JEL: E32 G21 G31
    Date: 2017–07
  30. By: Steve Gui-Diby from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: Development trajectories of countries within the Asia-Pacific region vary significantly across countries. While some countries have experienced tremendous advancements in terms of economic and social indicators, others have not been quite as successful. Historical and cultural differences may explain part of the different development experiences of countries in the region. Yet, there is no doubt that the quality of governance and the effectiveness of public institutions are critical factors that contribute positively to the process of development. Indeed, it is universally accepted and incorporated into the 2030 Agenda that more effective, accountable and inclusive institutions (SDG 16), and gender equality and the empowerment of women and girls (SDG 5) are important for development.
  31. By: Aisa O. Manlosa; Harold Glenn A. Valera
    Abstract: This study sought to determine microscale damage estimates of the largest flood event in the history of the municipality of Jabonga in the province of Agusan del Norte. Jabonga is a lakeside municipality adjacent to Lake Mainit, the fourth largest lake in the Philippines. The study sought to on determine flood-prone areas in the municipality, characterize the flood event that occurred in the site from December 2010 to March 2011, estimate actual and potential damage for different flood scenarios, and determine variables that are significantly related to flood vulnerability and flood damage. A total of 870 households were surveyed. In the flood hazard zone, livelihood areas, particularly farms, are inundated for a month on average. Some houses are also inundated for about the same duration. Inundation time at the municipality scale is shorter. Results showed that the municipality is vulnerable, with about 90 percent of the damage to livelihood coming from the agriculture sector. Damage to the house, properties or belongings inside the house, and health also constitute significant costs. The study found that the duration of inundation of the work area is among the most important variables that determines level of damage. Unlike flash floods, flood resulting from lake overflow persists for a longer time and inundates important agricultural areas for over a month. Results of probit regression showed that in the hazard zone, monthly household income, land area farmed, number of livestock owned, frequency of flood incidence in the homes, flood velocity, and duration of inundation at the work area are variables significantly related to household flood vulnerability. The computed vulnerability coefficient was used as a variable in the flood damage model ran through tobit regression. Results showed that in the hazard zone, predicted vulnerability to flooding, total household monthly income, type of main occupation, farm area, and number of livestock heads owned are the significant variables. Using the flood damage model, the study found that for a flood that inundates a livelihood area for a duration of seven days, a household could incur damage amounting to at least PHP 7,686.83. The figure could climb higher to PHP 9,911.52 if duration of inundation lasts for 40 days.
    Keywords: flood damage assessment, lakeshore community
    Date: 2016
  32. By: Sudip Ranjan Basu and Rui Xu from the Macroeconomic Policy and Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: The 2030 Agenda for Sustainable Development was adopted by the 193 member States at the United Nations headquarters in September 2015, New York. The new development agenda aims to turn the policy focus of countries to sustain inclusive economic growth, energize investment for social justice, and prioritize efforts towards environmental sustainability. This global development process received additional boost due to the adoption of a new financing for development framework which was adopted at the Third International Conference on Financing for Development in July 2015, Addis Ababa. The financing agenda is comprised of a comprehensive set of policy actions with over a hundred concrete measures that are aligned with outcomes of the sustainable development goals. In this context, the policymakers are encouraged to prioritize structural reform measures and financial sector deepening strategies to mobilize domestic public resources, leverage domestic and international private financing, and explore the potential of international public financing that is expected to create a long-term sustainable financing for productive investment sectors.
  33. By: Steve Gui-Diby and Xin Li from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: This policy brief presents short case studies of e-tools that make up the different aspects of e-government; the latter encompassing the capacity or aptitude of the public sector to use information and communications technology (ICT) for public service delivery (e-tools) as well as the willingness of the government to use these tools to engage with its citizens and deliver services. The policy brief concludes with some disadvantages of using e-tools, and e-government related areas in which Asia-Pacific countries need to make more efforts.
  34. By: Juarez, Ruben (Department of Economics, University of Hawaii); Ko, Chiu Yu (Department of Economics, National University of Singapore); Xue, Jingyi (School of Economics, Singapore Management University)
    Abstract: Consider a sequential process where agents have individual values at every possible step. A planner is in charge of selecting steps and distributing the accumulated aggregate values among agents. We model this process by a directed network where each edge is associated with a vector of individual values. This model applies to several new and existing problems, e.g., developing a connected public facility and distributing total values received by surrounding districts; selecting a long-term production plan and sharing final profits among partners of a firm; choosing a machine schedule to serve different tasks and distributing total outputs among task owners. Herein, we provide the first axiomatic study on path selection and value sharing in networks. We consider four sets of axioms from different perspectives, including those related to (1) the sequential consistency of assignments with respect to network decompositions; (2) the monotonicity of assignments with respect to network expansion; (3) the independence of assignments with respect to certain network transformations; and (4) implementation in the case where the planner has no information about the underlying network and individual values. Surprisingly, these four disparate sets of axioms characterize similar classes of solutions — selecting efficient path(s) and assigning to each agent a share of total values which is independent of their individual values. Furthermore, we characterize more general solutions that depend on individual values.
    Keywords: Sequential Values; Sharing; Network; Redistribution
    JEL: C72 D44 D71 D82
    Date: 2016–12–11
  35. By: Sarah Flèche (Centre for Economic Performance - LSE - London School of Economics and Political Science); Warn Lekfuangfu (LSE - London School of Economics and Political Science, Chulalongkorn University (THAILAND) - Chulalongkorn University (THAILAND)); Andrew E. Clark (Centre for Economic Performance - LSE - London School of Economics and Political Science, LSE - London School of Economics and Political Science, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: To what extent do childhood experiences continue to affect adult wellbeing over the life course? Previous work on this link has been carried out either at one particular adult age or for some average of adulthood. We here use two British birth-cohort datasets (the 1958 NCDS and the 1970 BCS) to map out the time profile of the effect of childhood on adult outcomes, including life satisfaction. We find that the effect of many aspects of childhood do not fade away over time, but are rather remarkably stable. In both birth cohorts child non-cognitive skills are the strongest predictors of adult life satisfaction at all ages. Of these, emotional health is the strongest. Childhood cognitive performance is more important than good conduct in explaining adult life satisfaction in the earlier cohort, whereas this ranking is inverted in the more recent BCS.
    Keywords: life satisfaction,cohort data,childhood,adult outcomes
    Date: 2017–07
  36. By: Xue, Jingyi (School of Economics, Singapore Management University)
    Abstract: This paper provides two equivalent representations for the general class of uncertainty averse preferences studied by Cerreia-Vioglio, Maccheroni, Marinacci and Montrucchio (2011). The two representations employ respectively two important extensions of Gilboa and Schmeidler (1989)’s maxmin decision rule. The first is a weighted maxmin representation with a non-constant weight used in mixing the minimum and maximum expected utilities. The second is a variant constraint representation which evaluates a prospect by the worst expected utility over a neighborhood of approximating priors where the size of the neighborhood depends on the prospect. The equivalent representations have advantage in several respects. In the second part of this paper, we study the wealth effect under ambiguity. We propose axioms on absolute and relative uncertainty aversion and derive the three representations for the uncertainty averse preferences displaying decreasing (increasing) absolute uncertainty aversion. The characterization result not only provides a model of relevant behavior under ambiguity, but also shows how the two alternative representations stand out in presenting the changing patterns of one’s uncertainty aversion.
    Keywords: Ambiguity; Uncertainty Averse Preferences; Weighted Maxmin Representation; Variant Constraint Representation; Decreasing Absolute Uncertainty Aversion; Increasing Relative Uncertainty Aversion; Wealth Effect
    JEL: D81
    Date: 2016–03–17
  37. By: Xue, Jingyi (School of Economics, Singapore Management University)
    Abstract: Imagine that agents have uncertain needs and a resource must be divided before uncertainty resolves. In this situation, waste typically occurs when the assignment to an agent turns out to exceed his realized need. How should the resource be divided in the face of possible waste? This is a question out of the scope of the existing rationing literature. Our main axiom to address the issue is no domination. It requires that no agent receive more of the resource than another while producing a larger expected waste, unless the other agent has been fully compensated. Together with conditional strict endowment monotonicity, consistency, and strong upper composition, we characterize a class of rules which we call expected-waste constrained uniform gains rules. Such a rule is associated with a function that aggregates the two components of cost generated by an agent at an allocation: the amount of the resource assigned to him and the expected waste he generates. The rule selects the allocation that equalizes as much as possible the cost generated by each agent. Moreover, we characterize the subclasses of rules associated with homothetic and linear cost functions. Lastly, to appreciate the role of no domination, we establish all the characterizations with a decomposition of no domination into two axioms: risk aversion and no reversal. They respectively capture that a rule should not ignore the claim uncertainty, and neither should it be too sensitive to the claim uncertainty.
    Keywords: Claims Problems; Need Uncertainty; Fair Division; Waste; Expected-waste Constrained Uniform Gains Rule; Rationing; Bankruptcy
    JEL: C71 D63 D74 D81
    Date: 2017–01–03
  38. By: Hsu, Wen-Tai (School of Economics, Singapore Management University); Li, Xiaolu (Division of Economics, Nanyang Technological University); Tang, Yang (Division of Economics, Nanyang Technological University); Wu, Jing (Hang Lung Center for Real Estate and Department of Construction Management, Tsinghua University)
    Abstract: This paper explores two political factors for their potential effects on urban land supply in China: corruption, and competition for promotion. We find that standard urban-economic predictions hold in the sense that both population and income increases are strongly significant determinants for the increase in urban land supply. Conditional on these demand-side factors, we find that the usage of two-stage auctions (as a proxy for corruption) is highly correlated with the increase in land supply. The corruption effects are strongest for commercial land, followed by residential land and then industrial land. To shed light on the competition motives among prefectural leaders, we examine how the number of years in office affects land supply, and distinguish among different hypotheses. Our empirical results show robust rising trends in land sales (both in quantity and revenue). These results are consistent with the hypothesis that the impatience and anxiety in later years from not being promoted may contribute to the increase in land sales revenue in later years; they are inconsistent with the hypothesis that prefectural leaders may give up and become more corrupt in later years. We also find that prefectural leaders may aim for larger land sales revenue overall in the first few (around 5) years in office instead of larger revenue in the first couple years.
    Keywords: Land supply; China; Political factors; institution; Monocentric-city model
    Date: 2017–03–01
  39. By: Xiao, Weilin (School of Management, Zhejiang University); Yu, Jun (School of Economics, Singapore Management University)
    Abstract: This paper develops the asymptotic theory for estimators of two parameters in the drift function in the fractional Vasicek model when a continuous record of observations is available. The fractional Vasicek model is assumed to be driven by the fractional Brownian motion with a known Hurst parameter greater than or equal to one half. It is shown that the asymptotic theory for the persistent parameter depends critically on its sign, corresponding asymptotically to the stationary case, the explosive case, and the null recurrent case. In all three cases, the least squares method is considered. When the persistent parameter is positive, the estimate method of Hu and Nualart (2010) is also considered. The strong consistency and the asymptotic distribution are obtained in all three cases.
    Keywords: Least squares; Fractional Vasicek model; Stationary process; Explosive process; Null recurrent; Strong consistency; Asymptotic distribution
    JEL: C15 C22 G32
    Date: 2017–04–27

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